According to the U.S. Census Bureau, the value of nonresidential construction in the United States was estimated to be approximately $440 billion in 2002 (the most current figure available). Worldwide, the value of nonresidential construction is likely to be close to a trillion dollars, and may well exceed this. The cost of surveying work for this construction category varies significantly by project, of course, and is only one part to the overall construction process. For example, surveying may be as little as 0.25 percent of the total installed cost (TIC) for revamp of a large power generation plant, or it may be 10 times that for a reasonably complex transportation infrastructure project. While a small percentage in the overall picture, surveying work is undoubtedly an important phase of construction projects. How does laser scanning play a part in the nation's construction assets? And what are the economic impacts of this technology? For the argument that follows we estimated survey fees, conventional or otherwise, to be 1 percent of the TIC of projects in the United States-or $4.4 billion.
The total cost of services for 3D scanning is approximately $100 million or 1 percent of the worldwide survey market. We developed this estimate after lengthy interviews with service providers and suppliers of 3D laser scanning hardware and services. Our model factors in daily service rates, capital cost of the equipment and our estimates related to utilization rates. We estimate the incremental value that is delivered by using advanced 3D scanning services to be around 10 times the expenditure, or $1 billion. In other words, customers who spend $1 on 3D laser scanning services see a return of $10 in the form of cost, schedule, safety and quality benefits.
The economic benefits of using advanced 3D scanning can be seen in four main areas: cost and time savings, improved construction schedules, reduced maintenance and improved safety.
Surveying Cost and TimeThe first area where the economic impact of laser scanning can be seen is in the direct cost savings compared with conventional or manual survey methods. The evidence we've collected is anecdotal, but direct savings on the order of 10-20 percent from using 3D laser scanning are not uncommon. In cases where access is difficult, such as offshore platforms, savings can be much higher. For routine surveys of civil and transportation infrastructure, savings of 15-20 percent are reported. Saving 10-20 percent of the survey budget is a big deal to those responsible for survey budgets and to service providers. However, the adoption of 3D scanning is in its early stages-only a small fraction of its potential is being realized today. The time needed to collect data using 3D scanning can be reduced from weeks to days, a tremendous benefit if survey work is in the critical path of a project.
Construction SchedulesThe economic impact of laser scanning in the construction phase of a project reflects that the use of this technology can produce savings of 5-10 percent on total project cost. Schedule reductions on the order of 10 percent have also been documented. The cost and schedule savings devolve from reduced errors and rework on revamp projects. Much construction work is rework; in some industries such as process manufacturing in North America, estimates are that 60-80 percent of all work consists of revamping existing assets. Savings of just 5 percent on the TIC of U.S. nonresidential construction represents a whopping $2.2 billion potential savings every year. We believe this is a conservative estimate. Most of this value is still on the table, waiting to be reaped by construction firms and asset owners who drive the adoption of the technology.
Asset Operation and MaintenanceThe third area of direct economic impact of laser scanning is on the operation and maintenance of capital assets. Better metrology can reduce direct maintenance costs. Why? Components such as piping that are stressed at installation time corrode more quickly and wear faster. Sometimes these stresses can be traced to poor dimensional control at fabrication time or poor dimensional specification at design time. In either case, laser scanning has been proven to provide relief.
On the operations side, high-fidelity visualization of existing assets is key to effective operator training. CAD geometry is often out-of-date, nonexistent, or too difficult to manipulate for these purposes. For civil engineering projects the operational value of accurate 3D existing conditions data can take many forms, from the development of automated permitting systems to more sensible maintenance planning. The realization of asset operation and maintenance benefits for laser scanning is in its infancy. Big Oil, Big Power and Big Civil are just starting to realize these kinds of values on some small pilot projects. In our view, these benefits in time will dwarf the other benefits of using laser scanning.
Safety DividendsIt is hard to put a dollar figure on the value of improved safety; however, it is one of the biggest drivers to using laser scanning. The safety dividend is expressed differently among industries; in the field this means fewer surveyors working next to fast-moving traffic directly in harm's way, reduced radiation exposure on modifications to nuclear facilities, reduced rappelling over cliff faces, etc. Project safety is a big deal in nearly every project nationwide and worldwide; it increasingly drives the use of 3D laser scanning and other remote data capture technologies.
Present and Future PerspectivesWe estimate today's 3D laser scanning services market, which is approximately $100 million in size and growing at 35-40 percent, is just beginning to deliver on its promise of serving up tens of billions of value on a worldwide basis. Our best guess is that 3D laser scanning and other advanced dimensional control technologies are used on 1 percent of the projects where it would make economic sense to use them. The market may readily grow to 20 or 30 times its current size-or even more.
What will enable the fulfillment of the demand for the value scanning delivers? No doubt 3D scanning instruments will get more capable, lighter, faster and less expensive in time. Clients will continue the march to 3D work processes. However, service providers and clients alike who are waiting for these transitions to take place before retooling their work processes to use 3D scanning are leaving money on the table and risk missing the train altogether. Asset owners who can create the correct incentives to drive adoption of the technology will reap the most value.
Sidebar: Surveying Value Estimates Using Laser Scanning
- Worldwide put-in-place nonresidential construction: approximately $1 trillion
- Worldwide expenditure on surveying: approximately $10 billion
- Worldwide expenditure on 3D laser scanning: approximately $100 million
- Total incremental economic value delivered by 3D laser scanning today: approximately $1 billion
- Penetration of 3D laser scanning-based work processes: less than 1% of projects
This report was supplied by Spar Point Research LLC, an independent research firm based in Danvers, Mass. Spar Point developed a framework for the cost/benefit analysis of using laser scanning-based methods to capture existing-conditions data. Since then its research has allowed it to begin quantifying these benefits. Readers should beware that these arguments are based on order of magnitude estimates. Spar Point believes the arguments hold regardless of this uncertainty.